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Just something to read as post-factum - US Dollar strength forecasted to take global forex markets into the weekend
The US dollar (Currency:USD) is the driving force on global markets on Friday afternoon in London. A look at the spot markets shows:
Just something to read during the weekend
1. Oil price highest since January on Syria concernsOil rose to the highest level since January amid concerns about a possible escalation in Syria's civil war.
Benchmark oil for July delivery rose $1.16 to close at $97.85 a barrel on the New York Mercantile Exchange. Oil finished the week with a gain of $1.82 a barrel, or 1.9 percent.
Oil's closing price was the highest since Jan. 30. But U.S. stock markets fell following lackluster reports on consumer confidence and industrial production. Among other commodities, gold and silver rose, while the prices for industrial metals dropped.
Drivers head into the weekend paying around the same for gas as they did a week ago. The national average of $3.625 is about 9 cents higher than at this time last year.
2. Metals rise broadly; crude oil near high for year
Gold for August delivery rose $9.80 to $1,387.60 an ounce. Silver for July delivery rose 37.1 cents to $21.954 an ounce. July copper rose 1.65 cents to $3.2015 a pound. July platinum rose 30 cents to $1,447.40 an ounce and September palladium rose 65 cents to $731.70 an ounce.
Forbes: Can The World Afford Higher Interest Rates?
What explains the tumultuous market action of the past week? Put simply, there have been escalating fears that U.S. Federal Reserve will cut back on its US$85bn a month stimulus program. This has led to rising U.S. bond yields over the past month, thereby putting upward pressure on yields around the world.
Cutting back on QE would mean reducing the printed money that the Fed has been using to buy bonds. That would result in less liquidity, less money in the financial system. The printed money has helped support asset prices, particularly stock and bond markets. Less liquidity would reduce this support.
And just to continuing with this subject - from Forbes too : Jeff Gundlach: 3 Reasons Interest Rates Won't Head Much Higher
Reason #1: Global Growth is Slowing
Bond rates generally rise when growth is rising, causing inflation expectations to pick up and investors to demand a higher rate of return to compensate.
Reason #2: Inflation Expectations are falling again
To see what the market’s future inflation expectations are, traders often look at the 10 year breakeven rate, which subtracts the yield on a 10 year TIPS from the yield on a 10 year Treasury note.
Reason #3: The Fed is Not Going to Let Interest Rates Rise Much Higher
One of the biggest reasons the many have turned more optimistic about the US economy is that the housing market, which was at the center of the financial crisis, has started to turn around. One of the primary reasons why is that interest rates on mortgages have been at very low levels, making houses much more affordable for the average buyer
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It may be interesting for the traders who are trading USDJPY: Forex - USD/JPY weekly outlook: June 17 - 21
Monday, June 17
Japan is to release official data on tertiary industry activity, an important indicator of economic health. Australia is to produce a report on new motor vehicle sales, a leading indicator of consumer confidence.
Tuesday, June 18
The U.S. is to release official data on building permits, housing starts and consumer price inflation. Meanwhile, finance ministers and central bankers from the G8 group are to hold the second day of a two day summit in Northern Ireland.
Wednesday, June 19
Japan is to release official data on the trade balance, the difference in value between imports and exports. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke. The U.S. central bank is also to release its quarterly report on economic and inflation projections.
Thursday, June 20
The U.S. is to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.
Friday, June 21
BoJ Governor Haruhiko Kuroda is to speak; his comments will be closely watched for indications of the future direction of monetary policy.
Next trading week is coming ... so - it is some more to read about fundamental news - Dollar Outlook Next Week Hinges on Bernanke -
Monday, June 17
The U.S. is to publish the Empire state manufacturing index.
Also Monday, finance ministers and central bankers from the G8 group are to hold the first day of a two day summit in Northern Ireland.
Tuesday, June 18
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro zone.
The U.S. is to release official data on building permits, housing starts and consumer price inflation.
Meanwhile, finance ministers and central bankers from the G8 group are to hold the second day of a two day summit in Northern Ireland.
Wednesday, June 19
The Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke. The U.S. central bank is also to release its quarterly report on economic and inflation projections.
Thursday, June 20
The euro zone is to release preliminary data on manufacturing and service sector activity. France and Germany are also to publish individual reports. In addition, Germany is to produce data on producer price inflation.
The U.S. is to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.
As to USDCAD for coming trading week so read this thread.
Monday, June 17
Japan is to release official data on tertiary industry activity, an important indicator of economic health. Australia is to produce a report on new motor vehicle sales, a leading indicator of consumer confidence.
Just about Tertiary Index - it was released at 23:50 yesterday night GMT time (or at 01:50 am today). If Actual data > forecasts - it is good for currency (for JPY in our case).
Japan Tertiary Industry Index Flat In April :
An index measuring tertiary industry activity in Japan was flat on month in April, the Ministry of Economy, Trade and Industry said on Monday, standing at a seasonally adjusted 99.7. That missed forecasts for a gain of 0.2 percent following the upwardly revised decline of 0.9 percent in March (originally -1.3 percent).
Trading forex is a relatively new asset class for the general public and has only really become possible for most of us since the late 90's when many of us started getting the internet connected at home.
The reality of the matter is that trading is like any other profession, it takes practice, discipline, experience and hard work! And many people do succeed.
This episode of current affairs show Close Up offers a fascinating portrait of 80s job du jour: foreign exchange dealer. The intrepid reporter heads into "the pit" (trading room) and chronicles the working life of a senior 'forex' dealer, 25-year-old squash-playing accountancy graduate, John Key. The "smiling assassin" (and future Prime Minister) is a now-familiar calm and earnest presence amongst the young cowboys playing for fortunes and Porsches in the heady pre-sharemarket crash world: "they're like addicts who eat, breathe and sleep foreign exchange dealing".
From Forbes : Celebrate Ben Bernanke, Buy A Few Dividend Stocks
Ben Bernanke, who deserves the Nobel prize for helping the U.S. to avoid a deep deflationary depression, cannot catch a break. First, he is demonized for for his quantitative easing program that naysayers predicted would sooner or later destroy the value of the American dollar, as well as the double whammy of creating an horrific hyper-inflation. Unrestrained QE, the magnificent addition of trillions in monetary reserves was supposed to climax with the end of the world.